National

Special Report: `Made in
China' poses as RI's pride

President Susilo Bambang Yudhoyono should actually have shelved his pride when inaugurating the much-hyped Suramadu bridge, as most of the manpower, engineering, financing and raw material came directly from China, which is now in the process of strengthening its grip on the Indonesian economy.

Somewhere along the bridge "Made in China" labels may be emblazoned in the structure as more than half of the 28,000 tons of steel and 600,000 tons of alloy steel were imported from China despite the fact state steel company PT Krakatau Steel said it had the capacity to produce the same material.

At least 3,500 workers from Indonesia and China were involved in the development of the bridge that cost Rp 4.5 trillion (US$440 million), with the majority of the funding coming in a soft loan from China.

An Indonesian consortium of PT Adhi Karya and PT Waskita Karya helped their Chinese counterparts, a consortium of China Road and Bridge Corp. and China Harbor Engineering Co. Ltd, construct the bridge.

The influx of Chinese flavors in the bridge could not be avoided as under a deal for the bridge financing, China agreed to provide a bigger chunk of the money in exchange for securing most contracts for the construction and for supplying raw material from their companies.

Negotiated during the administration of president Megawati Soe-karnoputri, the bridge is actually a stepping stone for China to bring in similar project financing and construction schemes into Indonesia.

This has become even more apparent, after China agreed to actively participate in the financing and construction of Indonesia's ambitious 10,000-megawatt power plant programs, with Chinese companies securing nearly all the contracts for the construction and for supplying raw material.

While China is taking all the advantage it can from the projects, local companies and government officials will be likely left with a lengthy dispute over which companies will manage and operate the bridge.

Confusion has marred the selection of the operators and managers as ministers echoed different remarks on the issue.

State Minister for State Enterprises Sofyan Djalil has said he had formed a new state company to manage and operate the bridge with its executives currently in the selection process by his office.

He added the new company would also manage the surrounding special business zones, a claim denied by the local administrations, which say they will be in sole charge of managing the areas.

According to Sofyan, the establishment of the new state company will be set out in the draft of a new government regulation.

"We will gain long-term benefit from this bridge project. Thus we have to take care of this infrastructure *under the management of a state company* so it will last for hundreds of years," he said.

The Office of the Coordinating Minister for the Economy also had a hand in stirring up the confusion when it planned to open a bidding process for both local and foreign companies to operate the bridge 18 months after it opens.

"This is the first toll bridge constructed by the government. Once completed, it will be handed over to the private sector. There will be a tender process for that," Bambang said recently. He added the planned state company for the bridge would only act as an advisory board.

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